Housing & Real Estate Committee Report

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The City Council’s Committee on Housing and Real Estate spent two hours Monday morning discussing progress of the city’s Five Year Housing Plan, a blueprint the Department of Planning and Development developed in 2014 to create more affordable housing by 2018.

DPD is the lead agency for the City’s affordable housing, housing preservation, and homebuyer assistance programs, and Lawrence Grisham, the Deputy Commissioner of the Department’s Bureau of Housing, provided the committee with a progress report for the 1st Quarter of 2015. The City spent 29%, or $75M, of its projected 2015 allocation to support approximately 3,900 units of affordable housing, according to Grisham’s testimony.

He also said that the new Affordable Requirements Ordinance (ARO) the City Council passed in March is expected to help generate 1,200 new units of affordable housing and $95M in funding for affordable housing over the next five years. Grisham called the updated ordinance “very helpful” and expects the additional revenue to help fill a funding gap left by $75M in federal funding cuts. The ordinance takes effect October 12, 2015, but changes in the fee structure will be phased in over 12 months. It will apply to any project receiving a zoning change, city financial assistance, located in downtown planned development, or contains more than nine residential units.

But several aldermen on the committee, including its new Chairman, Ald. Joe Moore (49), who replaced ousted 31st Ward Ald. Ray Suarez, questioned whether the plan was on track to reach its 2018 goals. Representatives from community groups that work in some of the city’s most blighted neighborhoods also raised concerns about the fairness, cost and efficiency of DPD’s housing programs.

The progress report also comes at a time when DPD’s sister agency, the Chicago Housing Authority (CHA) is in the midst of another leadership change. CHA is the landlord for most of the city’s public housing stock and manager of some Section 8 programs. Mayor Rahm Emanuel announced Friday that he was appointing Eugene “Gene” Jones as the acting CEO, after Michael Merchant stepped down from the position. Jones will be the authority’s 8th CEO since the public housing agency started its billion dollar Plan For Transformation, which Mayor Richard M. Daley touted as the largest, most ambitious public housing redevelopment plan in the country. The plan is behind schedule, and CHA has been accused of sitting on undeveloped land and not spending the money allocated for the plan.

Ald. Moore pressed Grisham to explain how Jones appointment would address this problem, but Grisham said he was not the “best person to answer that question”, adding that he could only speak to Jones’ qualifications on a “personal level”. When Grisham deferred any further discussion on the topic to CHA, Ald. Moore said that he plans to hold a public forum so Jones and other CHA officials can go on record about the status of the plan and respond to public concerns.

Ald. Will Burns (4) said he was under the impression that one of the biggest challenges of mixed income developments is the layered financing needed to build market rate and affordable housing housing units. It was a point also raised by Ald. James Cappleman (46). Grisham agreed that the CHA’s Plan for Transformation was a big endeavor that relied heavily on state and federal funds and tax credits. He said in light of the City’s limited resources, DPD wants more federal investment to address the lack of private funds for the project.

“These are complicated projects. These are complicated issues,” Grisham said, noting how using public funds for development projects can increase construction costs 20% in some cases.

Ald. Pat Dowell (3) also asked about the status of federal Community Development Block Grant (CDBG) funding and the impact potential cuts to the federally-funded Low Income Home Energy Assistance Program (LIHEAP) could have on families. Grisham said the city continues to see a decrease in the CDBG allocation from the federal government. He expects additional cuts in the upcoming budget year. Those funds generally go to the Department of Family and Supportive Services and helps fund the city’s homeless programs. Grisham also anticipates additional cuts to the LIHEAP program, which helps low income families pay their utility bills. “It will have a terrible impact of families,” Grisham said, calling it a “lifeline” for families who can’t afford to pay their utility bills without it.

Two the the City Council’s newest members, Ald. Raymond Lopez (15) and Ald. Michael Scott, Jr. (24), who represent wards with a large number of vacant lots and abandoned buildings, asked Grisham about the programs DPD uses to address these troubled properties. Grisham said the Troubled Buildings Initiative (TBI) deals with most of the dilapidated and vacant properties by working with local aldermen or housing courts to identify problem properties. He admitted that since the initiative is predominantly done through the courts, “it is not quick, but we go through as many properties given the resources that we have.”

DPD’s Troubled Building Initiative received the most criticism during the public comments portion of the meeting. It’s a joint effort by the Community Investment Corporation (CIC), Department of Buildings, Law Department and other City agencies. CIC is in charge of assessing rehab costs, providing loans to new homeowners and recording all invoices for Multi-Family units. The Neighborhood Housing Services Redevelopment Corporation (NHSRC) oversees the single-family initiative.

Mark Carter, with the advocacy group ONE Chicago, accused DPD of using the Troubled Building Initiative as a gentrification tool that targets poor and distressed communities. “If we don’t control the Troubled Building Initiative, we are going to be wiped out of the city,” Carter said, alleging that delegate agencies, like CIC, use housing courts as a way to seize properties and exacerbate rehabilitation costs. He was concerned that like Detroit and Indiana, it was only a matter of time before someone was “raped or killed” in one of the city’s vacant buildings because it can take up to two years before a TBI property is refurbished and sold.

Ald. Lopez said that he was aware of Carter’s concerns and gave the example of West Englewood, where 20% of the properties are abandoned.

Melvin Bailey, with the Community Male Empowerment Project agreed with Carter, saying that he would like to see fast track demolitions and have community organizations, not delegate agencies, approved as TBI recipients.

Eithne McMenamin, a policy director with the Chicago Coalition for the Homeless, was concerned about the slow rollout of the TIF Purchase Rehab Program, which the organization as part of the Sweet Home Chicago Coalition, helped create in 2011. According to McMenamin’s testimony, the program has committed $4M and four TIFs to rehab vacant and abandoned buildings. McMenamin said while she has had a “productive” working relationship with DPD–her organization has met with DPD once a month since the rollout of the program–she is concerned with the slow rollout and expansion of the TIF program and the overall Five Year Housing Program. “If we continue at the current rate, meeting the $35M goal to create more than 500 units of affordable housing […] will be impossible,” McMenamin said. “We call for a real and sustainable commitment to this piece of the Five Year Housing Plan.” Ald. Moore asked her what she thinks would help expedite the process. McMenamin said a “more laser like focus” from the 5th Floor and the City Council.

David Peterson, Jr., the Executive Director of the National Pullman Museum and Pullman National Monument, asked if it was possible to use TIF dollars for “cultural economic development” under the umbrella of tourism. Ald. Moore deferred his question to Grisham and said they could discuss the issue after the meeting.

And of course, no committee meeting would be complete without testimony from George Blakemore. After giving an impassioned speech about what he described as a land grab in the city’s predominantly African American communities, Ald. David Moore (17) said Blakemore’s comments had merit and demanded more transparency from DPD.